Mass Refugee Inflow & Human Capital Investments: Evidence from Greek Refugees in Greece Elie Murard* Seyhun Orcan Sakalli** *IZA; PSE **HEC – University of Lausanne, PSE June 7, 2016 Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Motivation & Research Question • The relief and settlement of refugees has become one of the biggest challenges in the world • 59.5 m forcibly displaced people with 13.5 m displaced only in 2014 (UNHCR, 2015) Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Motivation & Research Question • The relief and settlement of refugees has become one of the biggest challenges in the world • 59.5 m forcibly displaced people with 13.5 m displaced only in 2014 (UNHCR, 2015) • The risks and costs faced by host communities, especially in low-income countries, might be high • epidemic, food/land/house scarcity, congestion of school and healthcare facilities, increased criminality Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Motivation & Research Question • The relief and settlement of refugees has become one of the biggest challenges in the world • 59.5 m forcibly displaced people with 13.5 m displaced only in 2014 (UNHCR, 2015) • The risks and costs faced by host communities, especially in low-income countries, might be high • epidemic, food/land/house scarcity, congestion of school and healthcare facilities, increased criminality • The impact on host localities remains an heavily understudied area in economics • Few cases: Uganda, Tanzania, West Germany • Short-term effects: labor market, food/housing prices, land use Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Motivation & Research Question • The relief and settlement of refugees has become one of the biggest challenges in the world • 59.5 m forcibly displaced people with 13.5 m displaced only in 2014 (UNHCR, 2015) • The risks and costs faced by host communities, especially in low-income countries, might be high • epidemic, food/land/house scarcity, congestion of school and healthcare facilities, increased criminality • The impact on host localities remains an heavily understudied area in economics • Few cases: Uganda, Tanzania, West Germany • Short-term effects: labor market, food/housing prices, land use How does inflow of refugees affect the human capital investment of natives in the mid- and long-run? Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix What we do • This paper focuses on Greco-Turkish compulsory exchange of population in 1922–1923 • Greece, a rural country with 5 million inhabitants in 1920, received an refugee inflow of 20 % of its population within 2 years • The first case of mass refugee settlement under the aegis of an international organization – the League of Nations Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix What we do • This paper focuses on Greco-Turkish compulsory exchange of population in 1922–1923 • Greece, a rural country with 5 million inhabitants in 1920, received an refugee inflow of 20 % of its population within 2 years • The first case of mass refugee settlement under the aegis of an international organization – the League of Nations • We examine the effect of the mass inflow of Greek refugees on the human capital formation of the host native population in Greece: • A novel dataset combining historical and modern censuses in 1920, 1928, and 1971 • Difference-in-differences: Variation in exposure to refugee inflow across provinces and birth cohorts Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Related Literature & Contribution • Effects of immigrant children on natives’ education: • Hoxby (1998), Betts (1998), and Borjas (2004): drop in schooling quality and negative peer effects in the US • Gould, Lavy, and Paserman (2009): In Israel in the 1990s, school resources crowding-out effects in Israel in the 1990s • Hunt (2012): positive effects on high school completion of natives in the US through raising returns to education by increasing the skill wage premium • Virtually no study exists on how the inflow of displaced refugees affects human capital in the host regions in the medium or long run • Baez (2011) examines the effects of the massive wave of refugees from Burundi/Rwanda on host children in Tanzania: reduction in height in early adulthood and in schooling Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Preview of results • The inflow of refugees has a positive impact on the literacy and primary school completion rates of natives • The effect is larger for males • The number of schools built between 1920 and 1927 and the number of refugee teachers per school age children in 1928 can almost totally account for the estimated impact • The inflow of refugees shifted the labor supply of natives to non-agricultural occupations • However, there is no statistically significant difference between the educational attainment of second-generation refugees and natives Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Roadmap 1 Intro 2 Background 3 Methodology & Results 4 Mechanism 5 Appendix Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Historical background • After the Greco-Turkish War of 1919–1922, almost a million Greeks fled Turkey in a few months time • Turkey and Greece signed an agreement on a population exchange at the Peace Conference of Lausanne in 1923: • The exchange involved almost 500,000 Turks and 1.5 million Greeks in total. Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Historical background • After the Greco-Turkish War of 1919–1922, almost a million Greeks fled Turkey in a few months time • Turkey and Greece signed an agreement on a population exchange at the Peace Conference of Lausanne in 1923: • The exchange involved almost 500,000 Turks and 1.5 million Greeks in total. • Due to the limited resources of the Greek State, the League of Nations intervened and formed the Refugee Settlement Comission (RSC) in 1923: • In addition to distributing land and houses to refugees, the RSC constructed roads, bridges, dispensaries, and schools. Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Historical background • After the Greco-Turkish War of 1919–1922, almost a million Greeks fled Turkey in a few months time • Turkey and Greece signed an agreement on a population exchange at the Peace Conference of Lausanne in 1923: • The exchange involved almost 500,000 Turks and 1.5 million Greeks in total. • Due to the limited resources of the Greek State, the League of Nations intervened and formed the Refugee Settlement Comission (RSC) in 1923: • In addition to distributing land and houses to refugees, the RSC constructed roads, bridges, dispensaries, and schools. • The institutional framework severely restricted the choice of refugees over the place of their final settlement: • The principal determinant of the place of settlement was the availability of cultivable and unoccupied land, in part abandoned by Muslim Turks. Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Distribution of refugees in 1928 Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Distribution of Turks left between 1920 and 1928 Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Correlation between the share of refugees and share of Turks left Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
Intro Background Methodology & Results Mechanism Appendix Roadmap 1 Intro 2 Background 3 Methodology & Results 4 Mechanism 5 Appendix Seyhun Orcan Sakalli (HEC – University of Lausanne) Mass Refugee Inflow & Human Capital Investments
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